Investment Products Aren’t Good Vs. Bad
If you want to start a fight among advisors, the most direct route to fisticuffs is a product debate, especially one about annuities and life insurance. Whether you’re for or against these products, there’s another pillar of peace of the mind that can shed positive light on our industry instead of another black-eye.
No matter how you slice it, financial products were created to solve a problem for certain types of people and their unique situations. We may each take a different route to the grocery store or exercise in different ways, but if we get to the store and keep fit in a way that we feel works well with other aspects of life, we’re likely to achieve a higher level of peace of mind. The same holds true for investing. One way is not better than another and once again, personal preferences can play a major role in how one feels after making an important decision. So we need to scrap the words “good” and “bad” when debating financial products and services and simply insert “appropriate” or “inappropriate.” It allows us to once again reposition the conversation and focus on the client’s situation instead of our differing roles and beliefs as practioners.
Some may stubbornly think, “I’m not going to support products or services I don’t believe in.” But, when we pit "good" products and services against "bad" products, we teach investors that a product or service will change how they think or feel. And that may be true in some cases and for some time, but it’s also only temporary. When things we can’t control change, and they will, we lose the client, and the industry suffers because what “we” said would work didn’t. Reality is, every financial product shines and dulls under different market conditions, and so instead of using derogatory terms to label what others do as negative or to market ourselves above others, we can foster better outcomes by assigning more flexible terms that can adjust as their lives or market conditions change.
Create A Life Planner Standard Instead Of A Fiduciary One
Another premise that has gradually become more prominent on path to financial peace of mind is the concept of life planning. The general idea is that there’s more to a client relationship than what is in their IRA or bank account. By taking the time to delve into what makes a client really tick, advisors can craft a better plan. At its core, this powerful and moving approach makes the fiduciary standard seem unnecessary. When you truly know clients and what’s most important to them, you can do more than only what you think is in their best interest.
Despite the approaches, positive energy and encouraging direction, it’s not as simple as having the client fill out a couple extra questionnaires. It’s a personal philosophy that advisors have to whole-heartedly adopt and garner new skills, alliances and support for. It will take, time, energy and money, but if we want our industry to be able to claim it provides peace of mind, we should all be pushing for a life planning standard instead of a fiduciary one.
Providing peace of mind to clients means advisors must acquire new skills and resources and combine them with our existing financial expertise. Doing so will allow us to ease client concerns about health-care costs, running out of money, Social Security benefits, adult children, aging parents, losing a loved one and more. It’s simply a matter of bringing personal as well as financial answers to light, changing our language to avoid labeling people and products as good or bad, and adopting a life planning approach that helps clients live a happier, healthier, and more connected retirement.
The compliance departments may have the upper hand on those of us who want to include the concept of peace of mind in our literature, but by changing who we are and what we do, we may be able to eventually change their minds as we change the lives of our clients. After all, bringing true freedom and peace of mind to retirement requires more than financial products. It comes from a commitment to the client’s overall well-being.
Robert Laura is President of SYNERGOS Financial Group, founder of RetirementProject.org, creator of the Retirement Wellness Report and DividendPaycheck.org, He can be reached at [email protected].